Book of the Week: The Affluent Society
01 Sep 2013
I read The Affluent Society by Harvard economist John Kenneth Galbraith to find out why people are poor. The book makes a lot of points, but I was lost in the beginning when the names of a bunch of economists were thrown around. I have no idea who these people are and what ideas they have. But it doesn’t matter what they think. Even though this book was written in 1957, economic and societal considerations are similar.
But perhaps most important of all, people approve most of what they best understand.
People listen to what they want to hear. This is why it is hard to get people to change their ways. They try to fit things into their view of the world.
No large industrial corporation in the United States, which is also large in its industry has failed or been seriously in danger of insolvency in many years. Where there has been danger, the government has come to the rescue. The security of tenure of corporation executes is remarkably high.
Big companies do not take risks like entrepreneurs, but are too big to fail when they fail to innovate. Companies take the approach of making more stuff, because that is what they do.
Men fight for what is important to them, and the businessman who senses his self-interest will battle vigorously for a value system which emphasizes the importance of production.
Businesses are setup to produce more stuff, because this is what those in power deem valuable. Increasing GNP is what defines economic prosperity. To increase GNP, we need to produce more stuff.
The income men derive from producing things of slight consequence is of great consequence to them. The production reflects the low marginal utility of the goods to society. The income reflects the high total utility of a livelihood to a person. For this reason, although there is conventional effort to deny it, income and employment rather than goods have become our basic economic concern.
People spend time to make things that don’t matter, so they have can have money to spend on things that matter. It is all about having a job rather than making important contributions to society. Why do people spend time at work doing things that bring little value to society?